Photo: Members of the congressional "super committee," shown above, have extraordinary power to decide America's economic fate for decades to come, if they agree on a plan.
As Congress’ deficit-cutting “super committee” considers whether to recommend reducing Social Security benefits, two reports released last week expose the declining retirement security of aging Americans—especially among women and people of color.
“Although Social Security does not contribute to the federal deficit, Social Security benefit cuts are at the center of discussions in Congress to reduce the federal debt,” noted Maya Rockeymoore, coauthor of the report, “Plan for a New Future: The Impact of Social Security Reform on People of Color."
“Super Committee” Considering Cuts
Rockeymoore, president and CEO of Global Policy Solutions, explained that the super committee consists of 12 members of Congress, half from each part, charged with proposing ways to slash the national debt.
Even though Social Security is self-funded by payroll taxes and cannot draw on the federal budget, she said, President Obama and members of Congress, including some Democrats, have urged the committee to recommend measures to fix the program’s predicted long-term financing shortfall. Although doing so is beyond the super committee’s charge, many believe it should be part of a “Grand Bargain” to show voters Washington is not incapable of taking action on long-term problems.
According to “Plan for a New Future,” though, any proposals to change Social Security need to consider that “workers and families of color are more vulnerable to economic instability and far less likely to have generational wealth than white families.”
The study was sponsored by the Commission to Modernize Social Security, which includes national policy experts representing African American, Asian American, Latino and Native American communities.
The report shows that although most people relate Social Security to its retirement benefits, 45 percent of African Americans using the program and 58 percent of “other” (Social Security’s lump designation of those neither black nor white) rely on the program for its disability coverage or its support for surviving widows and children when a family bread-winner dies. That compares with 26 percent of whites receiving disability or survivor’s benefits.
Rockeymoore, former research director of the Congressional Black Caucus, explained that ethnic workers’ reliance on disability and survivor’s benefits reflects workplace segregation in America, “with people of color more often working in physically challenging jobs that are more likely to lead to temporary or permanent disability, as well as early death.”
In a press release, commission member Leticia Miranda, of the National Council of La Raza noted, “Two-thirds of Latino workers are employed by companies that do not offer any type of retirement savings plan. Thus, Latinos tend to depend more on Social Security as their sole source of income in old age.”
Miranda added, “For many families Social Security is critical to staying out of poverty.”
Report coauthor Meizhu Lui, of the Insight Center for Community Economic Development, urged, “Rather than using a cuts-only approach to achieve solvency, Congress should identify Social Security reforms that make the program sustainable and that will improve it to meet the needs of those who rely on it most.”
The report calls for increasing Social Security’s revenue gradually to close its long-term funding gap, while also strengthening parts of the program for children, students, low-income women and workers in low-paying jobs, those unlikely to have private pensions or other savings to fall back on.
Insecurity in Wake of Great Recession
In fact, according to the new national poll, “Retirement on the Edge: Women, Men, and Economic Insecurity After the Great Recession,” almost half (47 percent) of all women surveyed in the United States and over one-third of men (35 percent) “have little or no confidence that their assets will last throughout their retirement.”
Confidence aside, the survey found that 40 percent of white women and 46 percent of white men have at least $20,000 put away for retirement in stocks, bonds or mutual funds, compared with only about half as many blacks and even fewer Hispanics.
"Many women and men report having dipped into their savings or retirement accounts to see them through the recession and slow recovery,” said the report’s coauthor, Heidi Hartmann, president of the Institute for Women’s Policy Research, which developed the study with the Rockefeller Foundation’s Campaign for the American Worker initiative.
According to the study, “Facing serious economic stress and bleak financial prospects, many Americans are rethinking the shape of their retirement.” The poll found that seven in 10 people among those not yet retired expect to continue working for pay during retirement. Of those 41 percent of women believe they will keep working in their later years “out of necessity,” compared with 29 percent of men.
The survey also found vigorous support for Social Security across party and income lines. Americans “do not believe the program is in crisis -- a perspective that is out of line with the current political debate,” says the report. It adds, “A majority of men and women would like to see benefits increased.”
“Now, more than ever, we need to strengthen programs like Social Security and Medicare so that they can provide the vital support American women and their families need," Hartman said.
This article by Paul Kleyman was written for New America Media and was originally posted on October 19, 2011.